The ABCs of Medicare

Geopolitics and economic impacts evolve; and thus, we evolve our investment allocations. Our March rebalance consisted of a series of targeted adjustments designed to keep portfolios aligned with our long-term objectives of producing a more consistent rate of return, while adapting to a changing investment environment. The takeaway is straightforward: we remain firmly invested in growth, but we’re being more intentional about how we are taking risk. The change during this rebalance is a refinement of positioning, not a retreat from our conviction. Staying Invested, With Better Balance We continue to maintain a modest equity overweight, as we believe stocks will still outperform bonds. Our logic reflects an economic macro backdrop that remains supportive. Economic growth has been resilient; earnings have held up, and inflation pressures continue to trend in the right direction. These conditions favor stocks and growth rather than stepping aside. At the same time, the market has begun to reward selectivity over concentration. In response, we trimmed positions that had grown disproportionately large, took profits on recent winners, and reduced some of our most concentrated factor tilts. The goal is not to reduce upside participation, but to pursue it with better diversification and durability. Tempering Regional Bets We made modest regional adjustments to improve balance without changing our core views: U.S. equities: We remain constructive on U.S. earnings power, but trimmed our overweight to the US, after a strong run to reduce concentration risk. Emerging markets: After meaningful gains, particularly tied to AI and semiconductor supply chain, we again took some profits while maintaining meaningful exposure. International developed markets: We reduced, but did not eliminate, our underweight, acknowledging that in a broadening market, extreme regional bets can become less efficient. The result is a more balanced global equity mix, designed to be resilient across a wider range of outcomes. Broadening Our AI Exposure The AI trade has been and continues to remain one of the most powerful long-term themes shaping the global economy. However, the opportunity is not evenly distributed. While many companies are experimenting with AI, only a small subset are successfully deploying it at scale in ways that meaningfully improve productivity and competitiveness. We believe we have strengthened our AI positioning through active investment strategies that seek to identify not only core technology builders, but also early adopters across industries. We have targeted companies that are using AI to create durable advantages rather than simply following the trend: Lessons learned during the .com era. As risks increase and the market becomes more selective, we believe this selective approach matters more than ever. Adding to Defense, with a Global Lens We also added to our exposure to defense stocks, reflecting what we believe is a multiyear, policy driven investment cycle tied to modernization and security priorities. Importantly, we shifted from a U.S. centric approach toward a more diversified global strategy, aiming to capture where defense spending is expanding most clearly. Defense plays a dual role in investment portfolios today: Not only is it a structural growth opportunity; we are also viewing it as a diversifying equity exposure with drivers distinct from traditional economic cycles. An economic recession doesn’t necessarily impact the need for a nation to defend itself. Strengthening Bonds as a Stabilizer Within fixed income, our focus during this rebalance was to improve resilience. Credit spreads are historically tight, meaning investors are being paid very little for taking on credit risk. In these conditions, credit (bonds) can behave more like equity (stocks) during market stress. As such, we reduced credit heavy exposures and added higher quality, longer duration government bonds. The intent is to make our bond allocation a more reliable shock absorber during periods of volatility. At the same time, we would like to preserve the flexibility to add risk later if credit sells off and valuations improve. The Bottom Line Our March 2026 rebalance kept portfolios in our ‘barbell’ structure. Assets are both positioned for growth, which has served us very well, while we continue to increase our defensive positioning. We believe defense has been increased by improving diversification, reducing concentration, and strengthening downside protection.  In short, following our March rebalance, assets are positioned to take advantage of opportunities to participate in an overall economically constructive outlook, but we believe are now better positioned to weather uncertainty with greater resilience. If you have questions about how these changes apply specifically to your cash flows or financial objectives, we welcome the conversation. Thank you for your continued trust and partnership. Important Disclosure This commentary is provided for informational purposes only and reflects general market views as of the date published. It is not intended as investment advice, a recommendation, or a solicitation to buy or sell any security. Asset allocation and diversification do not guarantee profit or protect against loss. Investing involves risk, including the possible loss of principal. Market conditions and investment strategies are subject to change. Please consult with your Buttonwood Financial Group advisor regarding your individual circumstances before making any investment decisions.

Tax season has a way of arriving faster than expected. And for 2026, there’s more worth paying attention to than usual—the IRS has updated key figures for tax year 2025, and enforcement around complex returns has intensified. But before you hand everything off to your CPA, a brief pause to review the right details can make the process smoother—and occasionally surfaces something worth acting on. The questions below are starting points for reflection and conversation, not tax guidance. 1. Did anything significant change last year? Life moves fast, and the tax code tries to keep up. A new job, a growing family, a home purchase, a business change, or even a large one-time expense can shift your tax situation in ways that deserve attention. This is also worth thinking about through the lens of your broader advisor team—changes that affect your investments, estate plan, or business interests often have tax consequences that only surface when everyone is looking at the full picture together. If it felt significant, it’s probably worth mentioning. 2. Have you collected all your income documents? Before anything else, make sure the full picture is on the table. W-2s, 1099s, K-1s, Social Security statements, and brokerage summaries should all be accounted for—and reviewed for accuracy, not just collected. A number that looks wrong is worth questioning before your return is filed. One timing note worth flagging: if you hold interests in partnerships, LLCs, private equity funds, or real estate partnerships, K-1s often don’t arrive until mid-March. If your CPA isn’t expecting them, there’s a real risk of filing prematurely without crucial income information 3. Is your paperwork actually ready to hand off? There’s a difference between having your documents and having them organized. A simple folder—digital or physical—sorted by category saves time, reduces back-and-forth with your CPA, and lowers the chance something gets missed in the shuffle. Five minutes of organizing now can prevent a week of delays later. This matters especially if you work with multiple advisors: your wealth manager, CPA, estate attorney, and business attorney each hold pieces of the puzzle. Information that stays siloed between professionals is one of the most common sources of unnecessary complications at filing time. 4. Are your charitable contributions documented? Good intentions don’t substitute for good records. Whether you gave cash, wrote checks, or donated property, make sure you have acknowledgment letters, receipts, or bank records to back it up. For larger contributions, the bar is higher: cash gifts over $250 require written acknowledgment from the charity, non-cash contributions over $500 require Form 8283, and those over $5,000 typically require a qualified appraisal. If you donated appreciated stock or gave through a donor-advised fund, your CPA will also need cost basis information and confirmation of fair market value on the donation date—details that may require coordination with your investment advisor. Timing matters too—gifts need to have been completed by December 31 to count for the prior tax year. 5. Do you have a clear picture of your investment activity? It’s easy to forget about trades made months ago, but we haven't. Sales, exchanges, dividend reinvestments, and distributions can all carry tax consequences. It’s also worth confirming whether any tax-loss harvesting was done on your behalf during the year—those transactions affect your overall gain and loss picture and your CPA should understand them in context. Similarly, if you exercised stock options, received vested restricted stock, or completed a Roth conversion, those activities need to be clearly communicated. Reviewing your year-end statements before you meet with your CPA helps ensure nothing catches anyone off guard. 6. Did your retirement contributions land where you intended? Confirm that what you planned to contribute actually went in—and in the right accounts. If you came up short on IRA contributions, you may still have time to make it right before the filing deadline. If you own a business or have self-employment income, it’s also worth verifying that any retirement plan contributions made through your business are properly coordinated with your personal return. It’s also worth asking whether your current savings rate still fits your retirement timeline. 7. Are your benefit and healthcare accounts squared away? HSAs, FSAs, and similar accounts have their own rules and reporting requirements that are easy to overlook. An HSA withdrawal used for a non-qualified expense, for instance, can trigger a penalty. Pull together your account statements and any related documents so your CPA has the full picture. If you own a business, it’s also worth confirming that health insurance premiums paid through your company are being handled correctly on both your business and personal returns—this is an area where coordination between your bookkeeper and CPA matters more than people expect. 8. What do you want to be more intentional about this year? Tax season is one of the few times most people take a genuine look at their finances. Use that momentum. Beyond filing, consider asking your CPA what your estimated tax payments should look like for 2026, whether any positions on this return carry higher audit risk, and what planning opportunities exist based on what they’re seeing in your return. The IRS has meaningfully intensified enforcement around high-income filers in recent years—particularly around partnership interests, digital asset transactions, and international holdings—so this isn’t a moment to treat compliance as a formality. Whether it’s adjusting your withholding, revisiting your giving strategy, or thinking through a major financial decision ahead, the earlier a conversation starts, the more options you typically have. A Note on 2025 Figures The IRS adjusted several key thresholds for tax year 2025. The standard deduction increased to $15,750 for single filers and $31,500 for married filing jointly, with an additional enhanced deduction of up to $6,000 per qualifying individual age 65 or older ($12,000 for married couples where both spouses qualify). Notably, legislation temporarily increased the cap on state and local tax (SALT) deductions to up to $40,000 for tax years 2025 through 2029 for certain taxpayers who itemize. This expanded cap is subject to income‑based limitations and may phase down for higher‑income filers, meaning the benefit varies significantly based on overall income and deduction profile. As always, whether itemizing or taking the standard deduction makes sense depends on your specific situation and should be reviewed with your CPA. Estate and gift tax exemptions also saw inflationary adjustments for 2025, which may be relevant if wealth‑transfer planning was part of your year. How we can help? We work alongside your CPA—not in place of them. Our role is to help you stay organized, think through priorities, and make sure your financial decisions are working together toward a bigger goal. In our experience, the families who navigate tax season most efficiently are those who proactively connect the pieces across their professional team, rather than assuming the information flows automatically. If it would be helpful to talk through what’s on your plate before you sit down with your tax advisor, we’re glad to do that. Thank you for your continued trust and for allowing us to provide solutions-not just plans. This information is provided for general educational purposes only and should not be considered tax advice. Please consult your tax professional regarding your specific situation

As we closed out 2025, our Investment Policy Committee (IPC) continued its work to refine strategies that balance risk, liquidity, and long-term growth. In our previous update , we shared how the inflation shock of 2022 reshaped our approach to fixed income and led to a more nimble, systematic positioning of bond assets. That proactive discipline remains a cornerstone of our investment process. As we wrapped up 2025, our Investment Policy Committee (IPC) continues efforts to refine strategies that balance risk, liquidity, and long-term growth. With the Fed reducing overnight lending rates for the third time, recent IPC discussions have turned to another critical focus area: cash management. Why Cash Strategy Matters Now With interest rates still elevated and market uncertainty persisting, many investors hold larger-than-usual cash positions. While cash provides stability, it also introduces opportunity cost if left idle. One of our IPC objectives is to ensure that excess cash works harder for you, without compromising liquidity for emergencies or near-term cash needs. Refining Our Cash Allocation Policy For our clients with larger cash needs (generally more than 5% or $50k of liquid assets in cash or money market funds), we are shifting to a proactive T-Bill management strategy, or other suitable investments based on goals and circumstances. For our clients holding less than $50k in cash or money market, we have retained money market for liquidity, but we have made a switch to the default money market fund we are using. Risk and Tax Aware Money Market Selection While yields are similar across money markets today, the underlying investments in each money market fund vary quite a bit. For example, Schwab Prime Money Market (ticker SWVXX) offers a slightly higher yield but invests in asset-backed commercial paper (ABCP), introducing a modest credit risk. In contrast, Schwab Government Money Market (ticker SNVXX), invests primarily in U.S. Treasuries and government-backed securities, making it virtually risk-free and often state income tax-advantaged. With lower risk and only about 10/100’s of 1% yield difference, our IPC has proactively transitioned clients from SWVXX to SNVXX, to prioritize safety and tax efficiency over a marginal yield difference. Connecting Back to Our Broader Strategy These cash management refinements build on the fixed income strategy we recently outlined. By reducing exposure to inflation-sensitive bonds and implementing a more systematic approach, we are positioning portfolios to be more resilient across potentially weaker or higher-rate environments. Optimizing cash allocations and minimizing credit risk within money markets reinforces the same core principle—protecting downside risk while prudently capturing incremental return opportunities. Looking Ahead As we enter 2026, our investment approach remains focused and disciplined. We continue to prioritize liquidity for cash needs, thoughtful risk management, and systematic investment strategies designed to adapt to evolving market and economic conditions. This proactive framework supports long-term portfolio resilience while remaining aligned with your financial objectives. If you have questions about how these updates may impact your investments, cash management, or overall financial plan, we encourage you to connect with your financial advisor at Buttonwood. Our team is committed to delivering personalized wealth management and asset allocation strategies—regardless of market or economic uncertainty. Thank you for your continued trust and for allowing us to coordinate your asset management as part of our Family CFO services.

How to Talk About Money with Family Over the Holidays. Whether your family is just beginning to plan or has been navigating financial decisions across generations

As year-end approaches, many clients focus on charitable giving—supporting causes they care about while optimizing their tax strategy. This year carries added urgency: the One Big Beautiful Bill Act (OBBBA) will significantly change charitable giving rules in 2026.